Aquero Company has selected a few target markets for ongoing work
at present. The first Aquero products are being introduced and marketed by partner companies. These products are
detailed elsewhere in these pages but include agricultural additives for irrigation farming and water clarification chemicals
and protocols for specific hard-to-treat, produced waters in some under-served sectors.

Earthen irrigation canal in California

Aquero's chemical materials potentially address many applications currently serviced
by acrylic and other vinyl polymers that collectively fill markets measured in billions of pounds of annual use.
As explained in a previous section, we are not targeting the commodity markets at this stage. However, there are companies
interested in our chemistry that are evaluating some of our experimental samples for applications ranging from personal
care products (cosmetics, conditioners, and lotions) to dust-control agents.

The Aquero materials meet the
targets for cost and performance in these markets. Manufacturing and distribution infrastructure is in place for some
of the products. We are continuing the process of discovery, R&D, and commercial launch in several areas that are
well-matched to our molecules and products.

Some Observations
about Strategy

We researched biopolymers extensively in the 1980's and 1990's as water treatment
chemicals, detergent additives, and superabsorbents. Our patents in the mid 1980's were the first to cover polyaspartates
as water treatment chemicals and detergent additives. By the mid 1990's, we had succeeded in patenting a polyaspartate-based
composition for superabsorbency. We produced the first kilogram of a polyaspartate superabsorbent and participated
in "field" assessments of this material including controlled experiments with panels of babies and toddlers in prototype
diapers. Our superabsorbent had been formulated to a range of specifications such as particle size, gel strength, gel
volume and the like. It performed at parity or better across a range of product attributes as compared to commercial,
acrylate superabsorbent. These projects were each supported by major multinational companies and conducted in collaboration
with their chemist inventors and chemical engineers.

However, the attempt to compete with globalized vinyl polymers,
driven by the scale of the target markets even though the margins are low, was a mistake. As stated earlier, although
these interesting and useful biopolymer compositions have been commercialized on a moderate scale, they have not been adopted
in commodity markets. The main reason is economic, but infrastructure also has been critical.

That is, the vinyl monomers are comparatively inexpensive, they are available from multiple sources around the world, the
manufacturing processes of the polymeric materials are well-defined, and there is plenty of manufacturing capacity likewise
distributed globally. Our biopolymer materials did not offer any of these market advantages.

It seems obvious now that a better strategy would have been to identify a market of entry that was better suited to
the products. Our products need to be categorized like one or more of the following, assuming at minimum an acceptable
standard of cost/performance for the market:

▪
A new product that fills a need in a niche market with higher margins.

▪ A new product that solves a problem that has been
poorly addressed.

▪ A new product that solves a problem that has not been addressed.

▪
A new product that can clearly compete better on cost/performance.

▪
A novel and better way to solve a problem using available chemistries.